Japan announced on November 19, 2020, with Reuters to begin next year a test to experiment with its own cryptocurrency. More than 30 major Japanese companies.
The issuance of this common and private digital currency will be handled by private banks, but could be supported by “other entities”. It is nevertheless subject to the support of the Japanese, qualify several executives of the sector to the media.
Japanese financial behemoths in the race
This announcement follows the Bank of Japan’s plan, revealed in October, to experiment with issuing a digital yen. According to the international agency, the project of a cryptocurrency was born from the awareness of the Tokyo authorities towards their delay in this financial technology. “Japan has many digital platforms, but none is strong enough to surpass cash payments,” admits Hiromi Yamaoka, head of the consortium. The consortium aims to quickly create “a framework that can make these different platforms mutually compatible.
In Japan, digital payments represent only 20% of transactions. This is far below the level of the United States (45%) and its neighbor China (70%). China is a pioneering country in cryptocurrency, with initial tests last spring and a planned rollout in 2022.
Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc have deployed their own digital payment infrastructures, which are only interoperable. According to our colleagues at Reuters, these financial giants are “lagging behind” Japanese companies such as PayPay (SoftBank). However, Japan is not starting from scratch. The country claims a strong cryptocurrency investor and user base and was in 2018 the third largest country in terms of Bitcoin users.
Mizuho Financial Group is a public banking sector holding company that in March this year, 2019 plans to launch its own yen-based crypto-currency. The project was launched by a group of Japanese banks from the year 2017 and announces that when it comes into effect, the Japanese will have a ready ecosystem and will be able to pay their own daily fees. Crypto J-Coin.
It will not show changes in the exchange rate and will not be listed on the stock exchange. It will be the equivalent of the Japanese yen in the digital dimension (stablecoin or one-to-one).
J-Coin will be operated by Tokyo and surrounding banks and will not generate any exchange or deposit costs, and its implementation will be immediate. In addition, all transactions made by users, as well as by stores that accept the new currency, should be free of charge. There will also be a free transfer of funds from the bank to a smartphone and vice versa, as well as sending money to another user.
Japan has already implemented many solutions related to the crypto-currency market. Bitcoin for example, there is a legal crypto-currency there and you can pay with it in the store as well as pay your bills. The purpose of implementing the new J-Coin crypto-currency in Japan is to promote non-cash transactions.